Asian economies will rebound with or without a recovery in the US, helped by an anticipated pickup in Chinese demand that will benefit Taiwan and others in the region, Standard Chartered Group chief economist Gerard Lyons said in Taipei yesterday.
“Asia can experience a boom without the US booming and the US is not going to boom. Therefore, the recovery we are likely to see in Asia is a recovery where growth rates will pick up, but the level will not be the levels seen in the boom years of 2006, 2007 or the early part of 2008,” Lyons said. “The level will be more like those seen in the middle part of this decade.”
Albeit gradual, the recovery in China will directly boost most export-dependent Asian economies and indirectly boost confidence across Asia since half of exports from Taiwan, Malaysia and Singapore are shipped to China while the remainder goes to the West, he said.
Stronger demand in Asia’s economic engines will not be enough to offset the slump in demand from the West, Lyons said, as 60 percent of all Asian exports go to G7 countries. However, correcting the imbalance in global trade — which requires the West to spend less and save more, while Asia and the Middle East need to spend more and save less — will pave the road for a solid recovery in the world economy.
Standard Chartered projected the downturn in the US would bottom out this autumn, while European economies and Japan would bottom out at the end of this year.
China, India and Indonesia have already begun to recover, while most Asian economies — including Taiwan — will see signs of improvement in the fourth quarter, followed by a rebound next year, Lyons said.
The British bank predicted that the US economy would contract 3.5 percent this year, while the EU and Japan’s economies would shrink 4.4 percent and 5.8 percent respectively.
In Asia, China and India are expected to see robust growth this year of 6.8 percent and 5 percent respectively, while Malaysia, Taiwan and Singapore are likely to contract by 3.1 percent, 5 percent and 7.5 percent respectively.
Separately, Lyons said in a speech yesterday at the 11th Joint Meeting of the Taiwan British Business Council that Taiwan’s economic prospects were good and its companies should seize business opportunities in China.
Taiwan, like the UK, is an industrial country that should make the transition to a more service-driven economy by investing in research and development and knowledge-based capabilities, he said.
At the same meeting, David Campbell, director of the British Trade and Cultural Office, also expressed confidence in the country’s economy.
He said improved cross-strait relations had benefited both Taiwanese and British companies and that many British firms had expressed interest in Taiwan.
“This is a very good time for us to be raising the awareness in the UK of the changes and the new opportunities in Taiwan,” Campbell said.
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